Cryptocurrency and mainstream markets rebounded after the Fed announced interest rate cuts in 2024.

Digital assets are rebounding from broader markets after a three-day sell-off in response to the US Federal Reserve keeping interest rates on hold following the country’s strong economic performance.

On December 13, Federal Reserve Chairman Jerome Powell said interest rates were likely at or near their peak. “Inflation continues to fall and the labor market is in balance,” Powell said. “So far so good.”

A majority of the central bank’s open markets committee, which is responsible for setting interest rates, expects three rate cuts in 2024, according to a document published alongside the announcement. The labor market increased by 200,000 jobs in November and the annual inflation rate fell from 3.2%. GDP is on track to reach pre-pandemic projections.

Investors responded optimistically, with the Dow Jones index rising 500 points and exceeding 37,000, hitting an all-time high, while U.S. bonds, gold, and cryptocurrency also recorded gains.

But Powell said it would be premature to assume the U.S. economy is completely out of the woods yet. “Inflation is still too high, continued progress toward lowering it is not guaranteed, and the path forward is uncertain.” Powell continued. “The committee is proceeding cautiously.”

Bitcoin (BTC) rose 3.5% in 24 hours and Ethereum (ETH) rose 2.7% in response to the news, according to CoinGecko. Cardano was currently the top ten best performing cryptocurrency with a 13.6% gain, followed by Avalanche with 5.8%.

CFTC Chairman: “Digital assets are products”

Cryptocurrency investors may welcome new comments from Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam, who argues that most digital tokens are comprised of commodities. This contradicts the hawkish US Securities and Exchange Commission (SEC).

“Under existing law, many tokens constitute commodities,” the CFTC chief said. said CNBC Squawk Box, December 12. Benham went on to say that lawmakers must adopt “new ways of thinking about policy and legislation” as they apply “decades-old laws” to the evolving web3 phenomenon.

Benham noted that the long-running battle between the CFTC and the SEC over jurisdiction over digital assets continues, and that the SEC is actively seeking to regulate digital assets as securities through enforcement actions. Benham urged Congress to “get over the feeling of not wanting to legitimize the technology and get involved.”

“(Crypto) is not here to stay and we are seeing it in the price of larger coins,” Benham added. “There is a gap in regulation and Congress needs to step in,” he said. We’ve been talking about this for literally years, and we still don’t have a regulated environment.”